Current Economic Situation, January 2022
Manufacturing, Services and Jobs Improve,
Retail Sales Down
Manufacturing and services rose in November, as well as facilities and construction investment while retail sales declined. Employment continued to improve in December, consumer price inflation going up at a slower pace.
Industrial production rose 3.2 percent from the previous month in November as both manufacturing (up 5.1%, m-o-m and up 5.9%, y-o-y) and services (up 2.0%, m-o-m and up 5.3%, y-o-y) went up. Compared with a year ago, industrial production improved 5.3 percent.
Retail sales (down 1.9%, m-o-m and up 4.6%, y-o-y) fell in November, and facilities investment (up 10.9%, m-o-m and up 9.2%, y-o-y) increased, as well as construction investment (up 2.4%, m-o-m and down 5.6%, y-o-y).
Exports rose 18.3 percent year-on-year in December due to strong semiconductors, petrochemicals and other major exports. Average daily exports, an indicator calculated according to the days worked, rose 15.9 percent from a year ago (US $2.14 billion, December 2020 → US $2.48 billion, December 2021).
The consumer sentiment index (CSI) dropped 3.7 points in December to 103.9. The business sentiment index (BSI) for the manufacturing sector rose 5 points to 95, and the BSI outlook for January 2022 improved by 4 points to 92.
The cyclical indicator of the coincident composite index for November went up by 0.4 points, and the cyclical indicator of the leading composite index fell 0.4 points.
The economy added 773,000 jobs year-on-year in December and the unemployment rate fell 0.6 percentage points from a year ago to 3.5 percent.
Consumer prices rose 3.7 percent year-on-year in December due to high prices of personal services. Core inflation improved 2.7 percent.
Stock prices went up in December with better prospects for semiconductors. The won weakened and Korea treasury yields rose as Fed’s tapering accelerates.
Housing price growth eased in November (up 0.88% → up 0.63%, m-o-m), as well as growth in Jeonse (lump-sum deposits with no monthly payments) prices (up 0.62% → up 0.46%, m-o-m).
Despite strong exports and steadily improving job data, there are concerns that strengthened quarantine measures such as social distancing would negatively affect domestic demand including close-contact services.
Although the global economy has been on a recovery track, worries linger over growing inflation pressures and supply chain disruptions, and uncertainties remain due to the spread of the Omicron variant and shifting monetary policy in major countries.
The government will work hard, with thorough quarantine measures, to provide full support for economic recovery and those who struggle amid the pandemic, and at the same time will focus on properly dealing with inflation risks and improving livelihoods.
Please refer to the attached pdf for key statistics
